- Diluted EPS of $0.70 or adjusted EPS1 of
$0.85
- Pre-tax income of $186 million, adjusted
EBITDA1 of $273 million
- Operating cash flow of $207 million, record free cash flow1
of $201 million or $1.02 per share
- Total assets of $361 billion, a
year-over-year increase of 54%
- Net flow positive as a company on the
strength of U.S. and Canadian wealth management
- Reached agreements to acquire three RIAs
with over $21 billion in combined assets
- Expanded Canadian ultra-high-net-worth
wealth management with acquisition of Northwood Family
Office
- $246 million reduction in debt
- Paid quarterly dividend of $0.18 a share,
totalling $35.5 million
All financial
amounts in Canadian dollars at March 31, 2022, unless stated
otherwise. Financial amounts for the quarter are
unaudited.
CI Financial Corp. (“CI”) (TSX: CIX, NYSE: CIXX) today released
financial results for the quarter ended March 31, 2022.
“Achieving these strong results during a period of high economic
and market uncertainty demonstrates the strength and resilience of
our business model,” said Kurt MacAlpine, CI Chief Executive
Officer. “Over the past two-and-a-half years, we have transformed
and diversified the company, with wealth management now accounting
for over 60% of our assets and U.S. wealth management becoming our
largest business line by assets. These changes have made CI a
larger, stronger firm and are having an increasingly positive
impact on our revenues and earnings each quarter.
“The changes we made to our investment management platform
continue to pay off – our investment performance relative to our
peers is the highest in years and the redemptions in our mutual
fund products were 50% lower than in the first quarter of
2021.”
“In Canadian wealth management, we acquired the country’s
leading multi-family office in Northwood Family Office Ltd.” Mr.
MacAlpine said. “The common theme in our most recent acquisitions
is that they are all high-quality wealth management firms focused
on the very attractive ultra-high-net-worth segment.”
“We continue to execute on our strategy and achieved significant
milestones in U.S. wealth management during the first quarter. We
launched the CI Private Wealth partnership, which will be key to
driving the profitable growth of that business, and we reached
agreements to acquire three registered investment advisors with
more than $21 billion in client assets.
“We continue to take a balanced approach to allocating capital
between dividends, share repurchases and debt reduction. During the
quarter, we prioritized deleveraging and reduced debt by $246
million while also repurchasing shares and paying our regular
dividend.”
Starting this quarter, CI has expanded its segment reporting to
three segments and changed its income statement format. As CI’s
strategy has rapidly evolved over the past two years, the company
has reached a level of scale in its U.S. business that warrants
separate disclosures and greater visibility into the performance of
the business. CI has also expanded its asset management segment
disclosures to provide more insight around the composition of
assets under management. While prior periods have been restated to
conform with the new presentation format, there is no change to
consolidated financial results.
Operating and financial data highlights
FINANCIAL AND OPERATING
HIGHLIGHTS
[millions of dollars, except share
amounts]
As of and for the quarters
ended
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Mar. 31, 2021
Total AUM and Client Assets:
Asset Management AUM
136,271
144,247
139,380
138,187
132,626
Canada Wealth Management assets
78,957
80,633
76,859
75,521
71,066
U.S. Business assets
145,768
151,339
96,974
83,764
31,013
Total assets
360,996
376,219
313,213
297,472
234,704
Asset Management Net Inflows:
Retail
(861
)
142
684
530
(601
)
Institutional
(264
)
(331
)
(126
)
(360
)
(390
)
Australia
(305
)
82
159
(33
)
46
Closed Business
(203
)
(195
)
(146
)
(194
)
(222
)
U.S. Asset Management
402
260
250
413
284
Total
(1,231
)
(42
)
821
356
(883
)
IFRS
Results
Net income
137.5
123.7
45.4
118.4
124.8
Diluted earnings per share
0.70
0.63
0.22
0.58
0.60
Pretax income
185.8
175.1
82.4
166.6
162.2
Pretax margin
29.3
%
28.3
%
15.9
%
31.7
%
31.9
%
Cash flow from operating activities
207.7
179.2
135.2
158.1
177.8
Adjusted
Results1
Adjusted net income
166.8
171.0
159.2
153.0
151.6
Adjusted diluted earnings per share
0.85
0.86
0.79
0.74
0.72
Adjusted EBITDA
272.9
277.2
258.1
242.3
236.3
Adjusted EBITDA margin
46.4
%
47.7
%
47.0
%
48.4
%
50.2
%
Free cash flow
201.6
187.1
180.9
164.1
155.6
Average shares outstanding
196,111,771
196,816,227
199,321,002
203,039,536
207,476,125
Ending shares outstanding
192,987,082
197,422,270
197,443,135
201,327,517
203,944,785
Total debt
3,530
3,776
3,408
3,350
2,201
Net debt
3,352
3,453
2,655
2,461
1,856
Net debt to adjusted EBITDA
3.0
3.1
2.6
2.5
1.9
- Free cash flow, net debt, adjusted net income, adjusted
earnings per share and adjusted EBITDA are not standardized
earnings measures prescribed by IFRS. For further information, see
“Non-IFRS Measures” note below.
Financial highlights
Net income grew to $137.5 million in the quarter from $123.7
million in the fourth quarter. Excluding non-operating items,
adjusted net income declined slightly to $166.8 million in the
quarter from $171.0 million in the fourth quarter of 2021 as higher
earnings in our U.S. Wealth Management segment due to recent
acquisitions were offset by lower earnings primarily from our Asset
Management segment.
First quarter total net revenues grew 2.3% to $633.8 million in
the quarter from $619.3 million in the fourth quarter of 2021.
Excluding non-operating items, adjusted total net revenue increased
3.8% to $622.3 million, primarily driven by higher revenues from
our U.S. Wealth Management segment due to recent acquisitions,
partly offset by lower management fees from our Asset Management
segment due to lower average AUM.
First quarter total expenses increased 1.0% to $448.0 million in
the quarter from $444.2 million in the fourth quarter of 2021.
Excluding non-operating items, adjusted total expenses increased
5.1% to $384.8 million primarily due to acquisitions in our U.S.
Wealth Management segment.
Capital allocation
In the first quarter of 2022, CI repurchased 4.5 million shares
at a cost of $92.0 million, for an average cost of $20.21 per
share, and paid $35.5 million in dividends at a rate of $0.18 per
share. In addition, the company reduced debt by $246 million.
The Board of Directors declared a quarterly dividend of $0.18
per share, payable on October 14, 2022 to shareholders of record on
September 30, 2022. The annual dividend rate of $0.72 per share
represented a yield of 4.8% on CI’s closing share price of $14.68
on May 11, 2022.
First quarter business highlights
- CI Private Wealth US, LLC (“CIPW”) is the entity through which
CI holds its interests in its U.S. RIAs. CIPW is structured as a
limited liability company in which CI is majority owner. Certain
employees of CIPW and its affiliates subscribed for membership
interests in the firm which interests were issued effective January
1, 2022. This unique model aligns the interests of all member
partners and incentivizes them to collaborate, realize synergies,
and drive the profitable growth of the firm as a whole.
- CI agreed to acquire three U.S. registered investment advisors
(“RIAs”) with combined assets of approximately $21.6 billion. They
include:
- Certain assets of Eaton Vance WaterOak Advisors, formerly Eaton
Vance Investment Counsel (“EVIC”). The Boston-based EVIC team
joining CI acts as advisor on behalf of families, endowments,
foundations and other institutions. The transaction is expected to
be completed in the fourth quarter of 2022.
- Corient Capital Partners, LLC, of Newport Beach, California,
which serves ultra-high-net-worth individuals and families across
the United States. This transaction was completed on April 29,
2022.
- Galapagos Partners, LP of Houston, a multi-family office
serving wealthy families and individuals. This transaction also
closed on April 29, 2022.
- CI agreed to acquire Toronto-based Northwood Family Office Ltd.
(“Northwood”), Canada’s leading multi-family office. The
transaction was completed on April 1, 2022. Northwood manages and
co-ordinates the integrated financial, investment and personal
affairs of wealthy Canadian and global families and oversees
approximately $2.2 billion of investment assets.
- In February 2022, Euromoney announced that Northwood has been
ranked as the #1 family office in both Canada and North America in
the prestigious Euromoney Private Banking and Wealth Management
Survey for 2022.
- CI expanded its capabilities in digital assets with the
acquisition of a minority stake in Newton Crypto Ltd., a Canadian
crypto asset trading platform.
- CI Global Asset Management (“CI GAM”) continued to broaden its
ETF lineup with the launch of several thematic ETFs: CI Galaxy
Multi-Crypto ETF, CI Bio-Revolution ETF and CI Digital Security
ETF.
- CI GAM received securityholder approval for the merger of 21
mutual funds and six exchange-traded funds into other CI GAM
investment funds. The mergers, which were implemented on April 8,
2022, were an important step in modernizing CI’s asset management
business as they reduced product duplication and simplified the
lineup for CI GAM’s advisor and investor clients.
Following quarter-end:
- CI announced its intention to sell up to 20% of its U.S. wealth
management business via a U.S. initial public offering (“IPO”). CI
stated that it intends to use the net proceeds from the IPO to pay
down debt, and that a final decision on the IPO size, conditions
and timing is pending and will be subject to market
conditions.
- CI subsidiary CI Private Wealth US, LLC applied for a charter
to establish and operate a South Dakota trust company. Once
chartered, the trust company will offer administrative trust
solutions through CI’s U.S. wealth management platform.
- Products introduced by CI GAM included CI Galaxy Blockchain
ETF, CI Galaxy Metaverse ETF and CI Floating Rate Income Fund (ETF
Series).
Analysts’ conference call
CI will hold a conference call with analysts today at 9:00 a.m.
EDT, led by Chief Executive Officer Kurt MacAlpine and Chief
Financial Officer Amit Muni. A live webcast of the call and slide
presentation can be accessed here, or through the Investor
Relations section of CI’s website. Alternatively, investors may
listen to the discussion through the following numbers (access
code: 581835):
- Canada toll-free: 1-833-950-0062
- United States toll-free: 1-844-200-6205
- United States (New York local): 1-646-904-5544.
- All other locations: 1-929-526-1599.
About CI Financial
CI Financial Corp. is an integrated global wealth and asset
management company. CI’s primary asset management businesses are CI
Global Asset Management (CI Investments Inc.) and GSFM Pty Ltd.,
and it operates in Canadian wealth management through CI Assante
Wealth Management (Assante Wealth Management (Canada) Ltd.), CI
Private Counsel LP, Aligned Capital Partners Inc., Northwood Family
Office Ltd., CI Direct Investing (WealthBar Financial Services
Inc.), and CI Investment Services Inc.
CI’s U.S. wealth management businesses consist of Barrett Asset
Management, LLC, Balasa Dinverno Foltz LLC, Bowling Portfolio
Management LLC, Brightworth, LLC, BRR OpCo, LLC (Budros, Ruhlin
& Roe), The Cabana Group, LLC, Corient Capital Partners, LLC,
CPWM, LLC (Columbia Pacific Wealth Management), Congress Wealth
Management LLC, Dowling & Yahnke, LLC, Doyle Wealth Management,
LLC, Galapagos Partners, LP, Gofen & Glossberg, LLC, Matrix
Capital Advisors, LLC, McCutchen Group LLC, OCM Capital Partners,
LLC, Portola Partners Group LLC, Radnor Financial Advisors, LLC,
RegentAtlantic Capital, LLC, The Roosevelt Investment Group, LLC,
RGT Wealth Advisors, LLC, R.H. Bluestein & Co., Segall Bryant
& Hamill, LLC, Stavis & Cohen Private Wealth, LLC, and
Surevest LLC.
CI is listed on the Toronto Stock Exchange under CIX and on the
New York Stock Exchange under CIXX. Further information is
available at www.cifinancial.com.
Commissions, trailing commissions, management fees and expenses
all may be associated with an investment in mutual funds and
exchange-traded funds (ETFs). Please read the prospectus before
investing. Important information about mutual funds and ETFs is
contained in their respective prospectus. Mutual funds and ETFs are
not guaranteed; their values change frequently, and past
performance may not be repeated. You will usually pay brokerage
fees to your dealer if you purchase or sell units of an ETF on
recognized Canadian exchanges. If the units are purchased or sold
on these Canadian exchanges, investors may pay more than the
current net asset value when buying units of the ETF and may
receive less than the current net asset value when selling
them.
This press release contains forward-looking statements
concerning anticipated future events, results, circumstances,
performance or expectations with respect to CI Financial Corp.
(“CI”) and its products and services, including its business
operations, strategy and financial performance and condition and
its intention to conduct an IPO of its US wealth management
business. Forward-looking statements are typically identified by
words such as “believe”, “expect”, “foresee”, “forecast”,
“anticipate”, “intend”, “estimate”, “goal”, “plan” and “project”
and similar references to future periods, or conditional verbs such
as “will”, “may”, “should”, “could” or “would”. These statements
are not historical facts but instead represent management beliefs
regarding future events, many of which by their nature are
inherently uncertain and beyond management’s control. Although
management believes that the expectations reflected in such
forward-looking statements are based on reasonable assumptions,
such statements involve risks and uncertainties. The material
factors and assumptions applied in reaching the conclusions
contained in these forward-looking statements include that CI will
proceed with the IPO, that all outstanding acquisitions will be
completed and their asset levels will remain stable, that the
investment fund industry will remain stable and that interest rates
will remain relatively stable. Factors that could cause actual
results to differ materially from expectations include, among other
things, general economic and market conditions, including interest
and foreign exchange rates, global financial markets, the risk that
the IPO may not occur in its expected timeframe or at all, changes
in government regulations or in tax laws, industry competition,
technological developments and other factors described or discussed
in CI’s disclosure materials filed with applicable securities
regulatory authorities from time to time. The foregoing list is not
exhaustive and the reader is cautioned to consider these and other
factors carefully and not to place undue reliance on
forward-looking statements. Other than as specifically required by
applicable law, CI undertakes no obligation to update or alter any
forward-looking statement after the date on which it is made,
whether to reflect new information, future events or otherwise.
This communication is provided as a general source of
information and should not be considered personal, legal,
accounting, tax or investment advice, or construed as an
endorsement or recommendation of any entity or security discussed.
Individuals should seek the advice of professionals, as
appropriate, regarding any particular investment. Investors should
consult their professional advisors prior to implementing any
changes to their investment strategies.
CI Global Asset Management is a registered business name of CI
Investments Inc.
CONSOLIDATED STATEMENT OF
INCOME
For the three-month period
ended March 31
[in thousands of Canadian dollars, except
per share amounts]
2022
$
2021
$
REVENUE
Canada asset management fees
437,623
425,122
Trailer fees and deferred sales
commissions
(135,289
)
(132,700
)
Net asset management fees
302,334
292,422
Canada wealth management fees
138,246
119,570
U.S. wealth management fees
164,479
44,688
Other revenues
21,646
26,684
Foreign exchange gains
11,469
20,201
Other gains (losses)
(4,424
)
4,136
Total net revenues
633,750
507,701
EXPENSES
Selling, general and administrative
259,633
151,889
Advisor and dealer fees
106,908
95,092
Interest and lease finance
35,876
21,322
Amortization and depreciation
11,376
10,029
Amortization of intangible assets from
acquisitions
24,083
9,554
Transaction, integration, restructuring
and legal settlements
3,800
854
Change in fair value of contingent
consideration
3,088
22,209
Other
3,226
34,603
Total expenses
447,990
345,552
Income before income taxes
185,760
162,149
Provision for income taxes
Current
47,741
49,636
Deferred
511
(12,275
)
48,252
37,361
Net income for the period
137,508
124,788
Net income (loss) attributable to
non-controlling interests
(639
)
613
Net income attributable to
shareholders
138,147
124,175
Basic earnings per share attributable
to shareholders
$
0.70
$
0.60
Diluted earnings per share attributable
to shareholders
$
0.70
$
0.59
Other comprehensive loss, net of
tax
Exchange differences on translation of
foreign operations
(6,721
)
(15,953
)
Total other comprehensive loss, net of
tax
(6,721
)
(15,953
)
Comprehensive income for the
period
130,787
108,835
Comprehensive income (loss)
attributable to non-controlling interests
(1,052
)
294
Comprehensive income attributable to
shareholders
131,839
108,541
CONSOLIDATED BALANCE SHEET
[in thousands of Canadian dollars]
As at March 31, 2022
$
As at December 31,
2021
$
ASSETS
Current
Cash and cash equivalents
186,051
230,779
Client and trust funds on deposit
1,347,616
1,199,904
Investments
35,311
131,772
Accounts receivable and prepaid
expenses
275,167
272,962
Income taxes receivable
3,607
3,607
Total current assets
1,847,752
1,839,024
Capital assets, net
52,676
52,596
Right-of-use assets
136,827
142,606
Intangibles
6,113,366
6,185,237
Deferred income taxes
60,162
56,901
Other assets
452,646
383,187
Total assets
8,663,429
8,659,551
LIABILITIES AND EQUITY
Current
Accounts payable and accrued
liabilities
303,990
369,081
Current portion of provisions and other
financial liabilities
293,951
572,432
Redeemable non-controlling interests
564,064
—
Dividends payable
69,475
71,072
Client and trust funds payable
1,363,874
1,202,079
Income taxes payable
13,621
19,035
Current portion of long-term debt
225,268
444,486
Current portion of lease liabilities
19,617
20,216
Total current liabilities
2,853,860
2,698,401
Long-term debt
3,304,702
3,331,552
Provisions and other financial
liabilities
246,998
379,641
Deferred income taxes
478,849
480,777
Lease liabilities
148,253
153,540
Total liabilities
7,032,662
7,043,911
Equity
Share capital
1,777,507
1,810,153
Contributed surplus
31,018
28,368
Deficit
(172,743
)
(226,715
)
Accumulated other comprehensive loss
(29,352
)
(23,289
)
Total equity attributable to the
shareholders of the Company
1,606,430
1,588,517
Non-controlling interests
24,337
27,123
Total equity
1,630,767
1,615,640
Total liabilities and equity
8,663,429
8,659,551
STATEMENT OF CASH FLOWS
[in thousands of Canadian dollars]
2022
$
2021
$
OPERATING ACTIVITIES (*)
Net income for the period
137,508
124,788
Add (deduct) items not involving cash
Other gains (losses)
4,424
(4,214
)
Change in fair value of contingent
consideration
3,088
22,209
Contingent consideration recorded as
compensation
18,210
—
Recognition of vesting of redeemable
non-controlling interests
3,926
—
Equity-based compensation
4,536
3,008
Amortization and depreciation
35,459
19,583
Deferred income taxes
511
(12,275
)
Loss on repurchases of long-term debt
—
24,708
Cash provided by operating activities
before net change in operating assets and liabilities
207,662
177,807
Net change in operating assets and
liabilities
(52,856
)
11,869
Cash provided by operating
activities
154,806
189,676
INVESTING ACTIVITIES
Purchase of investments
(30
)
(104
)
Proceeds on sale of investments
94,659
—
Additions to capital assets
(3,311
)
(1,881
)
Increase in other assets
2,148
1,905
Additions to intangibles
(1,564
)
(3,615
)
Cash paid to settle acquisition
liabilities
(18,288
)
—
Acquisitions, net of cash acquired
(5,729
)
(2,314
)
Cash provided by (used in) investing
activities
67,885
(6,009
)
FINANCING ACTIVITIES
Repayment of long-term debt
(297,500
)
(549,695
)
Issuance of long-term debt
80,000
331,836
Repurchase of long-term debt
—
(45,953
)
Repurchase of share capital
(91,038
)
(112,744
)
Payment of lease liabilities
(5,210
)
(3,934
)
Redeemable non-controlling interest
83,330
—
Net distributions to non-controlling
interests
(1,489
)
(512
)
Dividends paid to shareholders
(35,511
)
(37,869
)
Cash used by financing
activities
(267,418
)
(418,871
)
Net decrease in cash and cash
equivalents during the period
(44,727
)
(235,204
)
Cash and cash equivalents, beginning of
period
230,778
483,598
Cash and cash equivalents, end of
period
186,051
248,394
(*) Included in operating activities are
the following:
Interest paid
9,665
18,983
Income taxes paid
52,277
44,855
ASSETS UNDER MANAGEMENT AND NET
FLOWS
[billions of dollars]
Quarters ended
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Mar. 31, 2021
Beginning AUM
144.2
139.4
138.2
132.6
129.6
Gross inflows
4.9
5.2
5.1
6.1
5.7
Gross outflows
6.6
5.5
4.5
6.1
6.9
Net inflows/(outflows)
(1.6
)
(0.3
)
0.6
(0.1
)
(1.2
)
Acquisitions
—
—
—
0.2
—
Market move and FX
(6.3
)
5.2
0.6
5.5
4.2
Ending AUM
136.3
144.2
139.4
138.2
132.6
Proprietary AUM
34.5
36.2
34.7
34.5
32.7
Non-proprietary AUM
101.8
108.0
104.7
103.7
99.9
Average assets under management
138.2
143.0
141.1
135.9
131.6
Annualized organic growth
(4.6
) %
(0.9
) %
1.6
%
(0.2
) %
(3.7
) %
Gross management fee/average AUM
1.30
%
1.30
%
1.31
%
1.31
%
1.32
%
Net management fee/average AUM
0.88
%
0.88
%
0.88
%
0.88
%
0.89
%
Net
Inflows
Retail
(0.9
)
0.1
0.7
0.5
(0.6
)
Institutional
(0.3
)
(0.3
)
(0.1
)
(0.4
)
(0.4
)
Closed business
(0.2
)
(0.2
)
(0.1
)
(0.2
)
(0.2
)
Total Canada net inflows
(1.3
)
(0.4
)
0.4
—
(1.2
)
Australia
(0.3
)
0.1
0.2
—
—
Total net inflows/(outflows)
(1.6
)
(0.3
)
0.6
(0.1
)
(1.2
)
RETAIL (ex Closed Business)
[billions of dollars]
Quarters ended
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Mar. 31, 2021
Beginning AUM
114.6
110.4
109.1
103.9
95.1
Net Flows
(0.9
)
0.1
0.7
0.5
(0.6
)
Market Move / FX
(5.3
)
4.1
0.6
4.5
9.4
Acquisitions
___
___
0.2
___
___
Ending AUM
108.4
114.6
110.4
109.1
103.9
Average AUM
109.6
113.8
111.8
106.8
102.8
INSTITUTIONAL
[billions of dollars]
Quarters ended
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Mar. 31, 2021
Beginning AUM
13.3
13.0
13.0
12.7
12.6
Net Flows
(0.3
)
0.3
(0.1
)
(0.4
)
(0.4
)
Market Move / FX
(0.3
)
0.6
0.1
0.7
0.5
Acquisitions
___
___
___
___
___
Ending AUM
12.7
13.3
13.0
13.0
12.7
Average AUM
12.9
13.2
13.3
13.0
12.8
AUSTRALIA
[billions of dollars]
Quarters ended
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Mar. 31, 2021
Beginning AUM
7.3
7.0
6.9
7.1
7.0
Net Flows
(0.3
)
0.1
0.1
(0.0
)
0.0
Market Move / FX
(0.4
)
0.2
0.0
(0.2
)
0.1
Acquisitions
___
___
___
___
___
Ending AUM
6.6
7.3
7.0
6.9
7.1
Average AUM
7.0
7.1
7.0
7.1
7.1
CLOSED BUSINESS
[billions of dollars]
Quarters ended
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Mar. 31, 2021
Beginning AUM
9.1
9.0
9.1
8.9
8.9
Net Flows
(0.2
)
(0.2
)
(0.2
)
(0.2
)
(0.2
)
Market Move / FX
(0.3
)
0.3
(0.0
)
0.4
0.3
Acquisitions
___
___
___
___
___
Ending AUM
8.6
9.1
8.9
9.1
8.9
Average AUM
8.7
9.0
9.0
9.0
8.9
AUM BY ASSET CLASS
[billions of dollars]
Quarters ended
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Mar. 31, 2021
Balanced
59.4
62.1
60.3
60.3
58.5
Equity
49.3
52.3
50.1
49.8
46.9
Fixed income
13.1
14.2
14.1
13.9
13.3
Alternatives
4.9
5.7
5.0
4.3
3.6
Cash/Other
3.0
2.7
2.8
2.9
3.2
Total Canada asset management
129.7
137.0
132.4
131.3
125.5
Australia
6.6
7.3
7.0
6.9
7.1
Total asset management segment
136.3
144.2
139.4
138.2
132.6
CANADA WEALTH MANAGEMENT CLIENT
ASSETS
[billions of dollars]
Quarters ended
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Mar. 31, 2021
Beginning client assets
80.6
76.9
75.5
71.1
67.3
Acquisitions
—
—
—
—
—
Net flows and market move
(1.7
)
3.8
1.3
4.5
3.8
Ending client assets
79.0
80.6
76.9
75.5
71.1
Average client assets
79.0
78.9
77.0
73.1
68.8
Wealth management fees/average client
assets
0.95
%
0.93
%
0.94
%
0.91
%
0.97
%
U.S. WEALTH MANAGEMENT CLIENT
ASSETS
[billions of dollars]
Quarters ended
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Mar. 31, 2021
Beginning billable client assets
146.4
96.1
82.9
30.7
29.0
Acquisitions
1.1
49.3
10.1
49.5
0.0
Net flows and market move
(6.3
)
1.0
3.1
2.7
1.7
Ending billable client assets
141.2
146.4
96.1
82.9
30.7
Unbillable client assets
4.6
4.9
0.9
0.8
0.4
Total client assets
145.8
151.3
97.0
83.8
31.0
Fees/beginning billable client assets1
0.46
%
0.50
%
0.52
%
0.71
%
0.63
%
12Q/21 adjusted for the timing of Segall
Bryant & Hamill acquisition
NON-IFRS MEASURES
In an effort to provide additional information regarding our
results as determined by IFRS, we also disclose certain non-IFRS
information which we believe provides useful and meaningful
information. Our management reviews these non-IFRS financial
measurements when evaluating our financial performance and results
of operations; therefore, we believe it is useful to provide
information with respect to these non-IFRS measurements so as to
share this perspective of management. Non-IFRS measurements do not
have any standardized meaning, do not replace nor are superior to
IFRS financial measurements and may not be comparable to similar
measures presented by other companies. The non-IFRS financial
measurements include:
- Adjusted net income and adjusted basic and diluted earnings per
share
- Adjusted EBITDA and adjusted EBITDA margin
- Free cash flow
- Net debt.
These non-IFRS measurements exclude the following revenues and
expenses which we believe allows investors a consistent way to
analyze our financial performance, allows for better analysis of
core operating income and business trends and permits comparisons
of companies within the industry, normalizing for different
financing methods and levels of taxation:
- gains or losses related to foreign currency fluctuations on our
cash balances
- costs related to our acquisitions including:
- amortization of intangible assets
- change in fair value of contingent consideration
- related advisory fees
- contingent consideration classified as compensation per
IFRS
- restructuring charges including organizational expenses for the
establishment of CIPW
- legal provisions for a class action related to market
timing
- certain gains or losses in assets and investments
- costs related to issuing or retiring debt obligations
- expenses associated with CIPW redeemable units.
Further explanations of these Non-IFRS measures can be found in
the “Non-IFRS Measures” section of Management’s Discussion and
Analysis dated May 12, 2022 available on SEDAR at www.sedar.com or
at www.cifinancial.com.
ADJUSTED NET INCOME AND ADJUSTED
EARNINGS PER SHARE
[millions of dollars, except per share
amounts]
Quarters ended
Mar. 31, 2022
Dec. 31, 2021
Mar. 31, 2021
Net Income
137.5
123.7
124.8
Amortization of intangible assets from
acquisitions
24.1
18.7
9.9
Change in fair value of contingent
consideration
3.1
43.9
22.2
Contingent consideration recorded as
compensation
—
2.1
—
CIPW adjustments
32.2
—
—
FX (gains)/losses
(11.5
)
(3.1
)
(20.2
)
Transaction, integration, restructuring
and legal
3.8
13.6
0.8
Other (gains)/losses
—
(16.8
)
7.1
Bond redemption costs
—
—
24.7
Total adjustments1
51.7
58.4
44.5
Tax effect of adjustments
(11.5
)
(11.1
)
(17.0
)
Less: Non-controlling interest
10.9
—
0.7
Adjusted net income
166.8
171.0
151.6
Adjusted earnings per share
0.85
0.87
0.73
Adjusted diluted earnings per
share
0.85
0.86
0.72
1Adjustment effects on income statement
line items: bond redemption costs are included in other expense,
CIPW adjustments and contingent consideration recorded as
compensation are included in SG&A, amortization of intangible
assets from acquisitions, change in fair value of contingent
consideration, FX (gains)/losses, other (gains)/losses, and bond
redemption costs are included in the line items of the same
description.
EBITDA, ADJUSTED EBITDA AND ADJUSTED
EBITDA MARGIN
[millions of dollars, except per share
amounts]
Quarters ended
Mar. 31, 2022
Dec. 31, 2021
Mar. 31, 2021
Pretax income
185.8
175.1
162.2
Amortization of intangible assets from
acquisitions
24.1
18.7
9.9
Depreciation and other amortization
11.4
10.9
10.0
Interest and lease finance expense
35.9
32.5
21.3
EBITDA
257.1
237.2
203.4
Change in fair value of contingent
consideration
3.1
43.9
22.2
Contingent consideration recorded as
compensation
18.2
2.1
—
CIPW adjustments
3.9
—
—
FX (gains)/losses
(11.5
)
(3.1
)
(20.2
)
Transaction, integration, restructuring
and legal
3.8
13.6
0.8
Other (gains)/losses
—
(16.8
)
7.1
Bond redemption costs
—
—
24.7
Total adjustments
17.5
39.6
34.6
Non-controlling interest
1.8
(0.4
)
1.7
Adjusted EBITDA
272.9
277.2
236.3
Reported net revenue
633.8
619.3
507.7
Less: FX gains/(losses)
11.5
3.1
20.2
Less: Non-Operating Other
gains/(losses)
—
16.8
—
Less: NCI revenues
34.5
17.9
17.0
Adjusted net revenue
587.8
581.5
470.5
Adjusted EBITDA margin
46.4
%
47.7
%
50.2
%
FREE CASH FLOW
[millions of dollars]
Quarters ended
Mar. 31, 2022
Dec. 31, 2021
Mar. 31, 2021
Cash provided by operating activities
154.8
163.7
189.7
Net change in operating assets and
liabilities
52.9
15.5
(11.8
)
Operating cash flow before the change
in operating assets and liabilities
207.7
179.2
177.8
FX (gains)/losses
(11.5
)
(3.1
)
(20.2
)
Transaction, integration, restructuring
and legal
3.8
13.6
0.8
Other (gains)/losses
—
—
7.1
Total adjustments
(7.7
)
10.5
(12.3
)
Tax effect (recovery) of adjustments
1.2
(2.6
)
(8.3
)
Less: Non-controlling interest
(0.4
)
—
1.7
Free cash flow
201.6
187.1
155.6
NET DEBT
Quarters ended
[millions of dollars]
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Mar. 31, 2021
Current portion of long-term debt
225.3
444.5
74.2
—
—
Long-term debt
3,304.7
3,331.6
3,350.2
3,350.2
2,200.9
3,530.0
3,776.0
3,408.4
3,350.2
2,200.9
Less:
Cash and short-term investments
186.1
230.8
653.9
801.3
248.4
Marketable securities
20.4
116.9
122.5
121.1
122.0
Add:
Regulatory capital and non-controlling
interests
28.8
25.0
23.1
33.4
25.9
Net Debt
3,352.3
3,453.4
2,655.1
2,461.2
1,856.4
Adjusted EBITDA
272.9
277.2
258.1
242.3
236.3
Adjusted EBITDA, annualized
1,106.8
1,099.8
1,024.1
971.9
958.3
Gross leverage (Gross debt/Annualized
adjusted EBITDA)
3.2
3.4
3.3
3.4
2.3
Net leverage (Net debt/Annualized adjusted
EBITDA)
3.0
3.1
2.6
2.5
1.9
SUMMARY OF QUARTERLY RESULTS
[millions of dollars, except per share
amounts]
IFRS Results
Adjusted Results
For the quarters ended
For the quarters ended
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Mar. 31, 2021
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Mar. 31, 2021
Revenues
Asset management fees
437.6
464.9
460.9
441.1
425.1
437.6
464.9
460.9
441.1
425.1
Trailer fees and deferred sales
commissions
(135.3
)
(143.6
)
(143.4
)
(137.7
)
(132.7
)
(135.3
)
(143.6
)
(143.4
)
(137.7
)
(132.7
)
Net asset management fees
302.3
321.3
317.5
303.5
292.4
302.3
321.3
317.5
303.5
292.4
Canada wealth management fees
138.2
134.9
132.5
119.9
119.6
138.2
134.9
132.5
119.9
119.6
U.S. wealth management fees
164.5
120.9
108.1
71.4
44.7
164.5
120.9
108.1
71.4
44.7
Other revenues
21.6
27.3
11.2
18.0
26.7
21.6
27.3
11.2
18.0
26.7
FX gains/(losses)
11.5
3.1
(50.3
)
8.2
20.2
—
—
—
—
—
Other gains/(losses)
(4.4
)
11.9
(1.1
)
3.8
4.1
(4.4
)
(4.9
)
(1.1
)
2.5
11.2
Total net revenues
633.8
619.3
517.9
524.7
507.7
622.3
599.4
568.2
515.2
494.6
Expenses
Selling, general & administrative
259.6
214.6
201.9
173.9
151.9
241.4
212.5
197.7
173.0
151.9
Advisor and dealer fees
106.9
104.8
103.4
93.4
95.1
106.9
104.8
103.4
93.4
95.1
Other
3.2
5.7
6.5
5.3
34.6
(10.8
)
5.7
6.5
5.0
9.9
Interest and lease finance expense
35.9
32.5
31.6
24.2
21.3
35.9
32.5
31.6
24.2
21.3
Depreciation and other amortization
11.4
10.9
10.3
9.7
10.0
11.4
10.4
10.0
9.4
9.7
Amortization of intangible assets from
acquisitions
24.1
18.2
16.4
11.7
9.6
—
—
—
—
—
Transaction, integration, restructuring
and legal
3.8
13.6
3.9
17.5
0.8
—
—
—
—
—
Change in fair value of contingent
consideration
3.1
43.9
61.4
22.4
22.2
—
—
—
—
—
Total expenses
448.0
444.2
435.5
358.2
345.6
384.8
365.9
349.2
305.1
287.9
Pretax income
185.8
175.1
82.4
166.6
162.2
237.5
233.4
219.0
210.1
206.7
Income tax expense
48.3
51.3
37.0
48.2
37.4
59.7
62.5
58.1
56.4
54.3
Net income
137.5
123.7
45.4
118.4
124.8
177.8
171.0
160.9
153.8
152.4
Non-controlling interest
(0.6
)
—
1.6
0.8
0.6
10.9
—
1.6
0.8
0.7
Net income attributable to
shareholders
138.1
123.7
43.8
117.6
124.2
166.8
171.0
159.2
153.0
151.6
Basic earnings per share
0.70
0.63
0.22
0.58
0.60
0.85
0.87
0.80
0.75
0.73
Diluted earnings per share
0.70
0.62
0.22
0.57
0.59
0.85
0.86
0.79
0.74
0.72
RESULTS OF OPERATIONS - ASSET
MANAGEMENT SEGMENT
[millions of dollars, except per share
amounts]
IFRS Results
Adjusted Results
For the quarters ended
For the quarters ended
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Mar. 31, 2021
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Mar. 31, 2021
Revenues
Asset management fees
442.5
469.6
465.6
445.5
429.2
442.5
469.6
465.6
445.5
429.2
Trailer fees and deferred sales
commissions
(143.9
)
(152.6
)
(152.4
)
(146.3
)
(141.1
)
(143.9
)
(152.6
)
(152.4
)
(146.3
)
(141.1
)
Net asset management fees
298.6
316.9
313.2
299.3
288.2
298.6
316.9
313.2
299.3
288.2
Other revenues
10.2
19.9
3.2
12.2
20.8
10.2
19.9
3.2
12.2
20.8
FX gains/(losses)
11.4
(1.4
)
(19.0
)
1.2
8.2
—
—
—
—
—
Other gains/(losses)
(4.4
)
12.0
(1.1
)
3.8
4.2
(4.4
)
(4.8
)
(1.1
)
2.5
4.2
Total net revenues
315.8
347.5
296.3
316.5
321.4
304.4
332.1
315.3
313.9
313.2
Expenses
Selling, general & administrative
96.8
108.7
109.6
104.9
102.8
96.8
108.7
109.6
104.9
102.8
Other
—
(0.5
)
1.6
0.2
0.3
—
(0.5
)
1.6
0.2
0.3
Interest and lease finance expense
1.0
0.5
0.5
0.6
0.6
1.0
0.5
0.5
0.6
0.6
Depreciation and other amortization
5.0
5.6
5.5
5.5
6.7
5.0
5.6
5.5
5.5
6.7
Amortization of intangible assets from
acquisitions
0.6
0.6
0.6
0.6
0.5
—
—
—
—
—
Transaction, integration, restructuring
and legal
(0.9
)
10.4
0.4
14.6
0.1
—
—
—
—
—
Change in fair value of contingent
consideration
4.0
14.2
1.9
10.0
—
—
—
—
—
—
Total expenses
106.5
139.4
120.2
136.4
111.1
102.8
114.2
117.2
111.1
110.4
Pretax income
209.3
208.0
176.1
180.1
210.3
201.6
217.9
198.1
202.8
202.8
Non-IFRS adjustments
Pretax income
209.3
208.0
176.1
180.1
210.3
201.6
217.9
198.1
202.8
202.8
Amortization of intangible assets from
acquisitions
0.6
0.6
0.6
0.6
0.5
—
—
—
—
—
Depreciation and other amortization
5.0
5.6
5.5
5.5
6.7
5.0
5.6
5.5
5.5
6.7
Interest and lease finance expense
1.0
0.5
0.5
0.6
0.6
1.0
0.5
0.5
0.6
0.6
EBITDA
215.9
214.7
182.7
186.7
218.1
207.6
223.9
204.1
208.8
210.0
Change in fair value of contingent
consideration
4.0
14.2
1.9
10.0
—
—
—
—
—
—
FX (gains)/losses
(11.4
)
1.4
19.0
(1.2
)
(8.2
)
—
—
—
—
—
Transaction, integration, restructuring
and legal
(0.9
)
10.4
0.4
14.6
0.1
—
—
—
—
—
Other (gains)/losses
—
(16.8
)
—
(1.4
)
—
—
—
—
—
—
Total adjustments
(8.3
)
9.2
21.4
22.1
(8.1
)
—
—
—
—
—
Less: Non-controlling interest
0.4
0.1
0.5
0.2
—
0.4
0.1
0.5
0.2
—
Adjusted EBITDA
207.2
223.8
203.6
208.6
210.0
207.2
223.8
203.6
208.6
210.0
RESULTS OF OPERATIONS - CANADA WEALTH
MANAGEMENT SEGMENT
[millions of dollars, except per share
amounts]
IFRS Results
Adjusted Results
For the quarters ended
For the quarters ended
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Mar. 31, 2021
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Mar. 31, 2021
Revenues
Canada wealth management fees
185.7
184.3
181.7
166.5
164.4
185.7
184.3
181.7
166.5
164.4
Other revenues
17.1
16.0
14.8
13.9
13.9
17.1
16.0
14.8
13.9
13.9
FX gains/(losses)
0.1
0.8
0.7
0.7
1.2
—
—
—
—
—
Other gains/(losses)
—
(0.1
)
—
—
—
—
(0.1
)
—
—
—
Total net revenues
202.9
201.1
197.2
181.1
179.5
202.8
200.3
196.5
180.4
178.3
Expenses
Selling, general & administrative
41.4
39.9
37.8
35.7
34.6
41.4
39.9
37.8
35.7
34.6
Advisor and dealer fees
145.6
145.2
143.5
131.3
131.4
145.6
145.2
143.5
131.3
131.4
Other
2.9
3.2
1.8
1.3
8.5
2.9
3.2
1.8
1.3
1.4
Interest and lease finance expense
0.2
0.2
0.2
0.1
0.1
0.2
0.2
0.2
0.1
0.1
Depreciation and other amortization
2.5
2.3
2.4
2.5
2.4
2.5
2.3
2.4
2.5
2.4
Amortization of intangible assets from
acquisitions
1.6
1.5
1.7
1.3
1.0
—
—
—
—
—
Transaction, integration, restructuring
and legal
0.8
0.1
0.1
—
0.5
—
—
—
—
—
Change in fair value of contingent
consideration
—
—
—
—
—
—
—
—
—
—
Total expenses
195.0
192.6
187.5
172.3
178.4
192.6
191.0
185.7
171.0
169.8
Pretax income
7.9
8.5
9.7
8.8
1.1
10.2
9.3
10.8
9.5
8.5
Non-IFRS adjustments
Pretax income
7.9
8.5
9.7
8.8
1.1
10.2
9.3
10.8
9.5
8.5
Amortization of intangible assets from
acquisitions
1.6
1.6
1.8
1.4
1.1
—
0.1
0.1
0.1
0.1
Depreciation and other amortization
2.5
2.3
2.4
2.5
2.4
2.5
2.3
2.4
2.5
2.4
Interest and lease finance expense
0.2
0.2
0.2
0.1
0.1
0.2
0.2
0.2
0.1
0.1
EBITDA
12.1
12.6
14.0
12.8
4.6
12.9
11.9
13.5
12.2
11.0
FX (gains)/losses
(0.1
)
(0.8
)
(0.7
)
(0.7
)
(1.2
)
—
—
—
—
—
Transaction, integration, restructuring
and legal
0.8
0.1
0.1
—
0.5
—
—
—
—
—
Other (gains)/losses
—
—
—
—
7.1
—
—
—
—
—
Total adjustments
0.8
(0.7
)
(0.6
)
(0.6
)
6.4
—
—
—
—
—
Less: Non-controlling interest
—
(1.5
)
0.7
0.5
0.3
—
(1.5
)
0.7
0.5
0.3
Adjusted EBITDA
12.9
13.5
12.8
11.6
10.7
12.9
13.5
12.8
11.6
10.7
RESULTS OF OPERATIONS - U.S. WEALTH
MANAGEMENT SEGMENT
[millions of dollars, except per share
amounts]
IFRS Results
Adjusted Results
For the quarters ended
For the quarters ended
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Mar. 31, 2021
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Mar. 31, 2021
Revenues
U.S. wealth management fees
164.5
120.9
108.1
71.4
44.7
164.5
120.9
108.1
71.4
44.7
Other revenues
4.8
1.3
2.6
0.9
0.5
4.8
1.3
2.6
0.9
0.5
FX gains/(losses)
—
3.7
(31.9
)
6.3
10.7
Other gains/(losses)
—
—
—
—
(0.1
)
—
—
—
—
(0.1
)
Total net revenues
169.2
125.9
78.8
78.6
55.9
169.2
122.2
110.7
72.3
45.2
Expenses
Selling, general & administrative
136.9
80.8
68.8
46.9
27.3
114.8
78.7
64.6
46.0
27.3
Advisor and dealer fees
—
—
—
—
—
—
—
—
—
—
Other
0.4
2.9
3.1
3.5
1.1
0.4
2.9
3.1
3.5
1.1
Interest and lease finance expense
0.5
0.4
0.4
0.2
0.1
0.5
0.4
0.4
0.2
0.1
Depreciation and other amortization
3.9
3.1
2.5
1.7
1.0
3.9
3.1
2.5
1.7
1.0
Amortization of intangible assets from
acquisitions
21.9
16.1
14.1
9.8
8.0
Transaction, integration, restructuring
and legal
3.9
3.1
3.4
2.9
0.2
Change in fair value of contingent
consideration
(0.9
)
29.7
59.5
12.4
22.2
—
—
—
—
—
Total expenses
166.5
136.1
151.7
77.4
59.9
119.6
85.2
70.5
51.4
29.5
Pretax income
2.7
(10.2
)
(72.9
)
1.2
(4.0
)
49.7
37.0
40.2
20.9
15.7
Non-IFRS adjustments
Pretax income
2.7
(10.2
)
(72.9
)
1.2
(4.0
)
49.7
37.0
40.2
20.9
15.7
Amortization of intangible assets from
acquisitions
21.9
16.5
14.4
10.1
8.3
—
0.5
0.3
0.3
0.3
Depreciation and other amortization
3.9
3.1
2.5
1.7
1.0
3.9
3.1
2.5
1.7
1.0
Interest and lease finance expense
0.5
0.4
0.4
0.2
0.1
0.5
0.4
0.4
0.2
0.1
EBITDA
29.1
9.9
(55.6
)
13.2
5.4
54.1
41.0
43.4
23.1
17.0
Change in fair value of contingent
consideration
(0.9
)
29.7
59.5
12.4
22.2
—
—
—
—
—
Contingent consideration recorded as
compensation
18.2
2.1
4.2
0.9
—
—
—
—
—
—
CIPW adjustments
3.9
—
—
—
—
—
—
—
—
—
FX (gains)/losses
—
(3.7
)
31.9
(6.3
)
(10.7
)
—
—
—
—
—
Transaction, integration, restructuring
and legal
3.9
3.1
3.4
2.9
0.2
—
—
—
—
—
Total adjustments
25.0
31.1
99.0
9.9
11.6
—
—
—
—
—
Less: Non-controlling interest
1.3
1.0
1.7
1.0
1.4
1.3
1.0
1.7
1.0
1.4
Adjusted EBITDA
52.8
40.0
41.7
22.1
15.6
52.8
40.0
41.7
22.1
15.6
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220512005469/en/
Investor Relations Jason Weyeneth, CFA Vice-President,
Investor Relations & Strategy 416-681-8779 jweyeneth@ci.com
Media Canada Murray Oxby Vice-President, Communications
416-681-3254 moxby@ci.com
United States Jimmy Moock Managing Partner, StreetCred
610-304-4570 jimmy@streetcredpr.com ci@streetcredpr.com
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